Originally published on our Group CTO blog.
I do normally hate end-of-year summary articles and new year forecast articles, but here I am speculating what 2013 will bring to the digital universe in general and to the digital sport business in particular.
Having done some research during the holidays period on what other more influent contributors have written and spending some time on:
2013 will be a transition year, i do not expect major disruptive or breakthrough innovation and trends to happen this year to the digital sport business. Instead we will see consolidation of trends either in a positive or negative way. 2012 was a major game-changer year and it will take time for the business to digest what happened.
What I’m reading everywhere and seeing in direct observation is back to what Gartner called “The nexus of 4 forces”:
- Big Data – this is maybe the less understood trend by the community in general and has a lot of potential, not everybody still realize how much data is now created every day and how much we can get insights if we can read and understand those data (see this McKinsey report). Big Data has a special meaning for sport, based on how to create value from detailed stats. At the moment we have figured out how to collect detailed stats in many sports both live and historically, but we have not yet figure out properly how to create value for end users and sport entities. There is a gap that waits to be filled by some smart companies (possibly startups).
- Social – Twitter is now the real-time channel for sport, facebook is the destination for sport personality and youTube is becoming a true broadcaster for mid to low level federations and events – this come with no surprise, all the 3 of them have heavily hired people from the sport business in the last 2 years (and some friends of mine too)
- Mobile – Mobile usage is exploding, and took a major leap in sport during last summer. 2013 will see the adoption of mobile to an even larger audience, the maturation of mobile user experiences and hopefully larger investments by sport companies into that area. Hopefully we will start to see the first signs of what at deltatre we call “Holistic User Experience (HUX)”: the true connected, continuous and pervasive multi-platform and multi-device user experience. The fact that applications should realize that the same user is accessing them through websites, and mobile apps on various devices and treat her/him as the same user not 3/4 different ones.
- Cloud – More a technology trend than anything but with an impact in how applications are designed and people are now used to imagine that data does not anymore resides on their devices, which will let them accept an more open universe of user experiences.
Everywhere else Social and Mobile are the two recurring topics – as they were in the last years, no surprises.
What really surprise me is how slowly the business is adopting this well anticipated major trend (mobile), a lot of companies and sport entities are still thinking, designing and operating for a desktop dominated world. This resistance could severely put their business at risk in the near future.
What 2012 told us (taken from a Comscore/NBC study on the olympics) is that:
- TV is (still) king
- Alternative screens ar additive (not a zero-sum game)
- Digital complements TV
- Social media amplifies sport events and engage viewers
- Cross platform and simultaneous use is “the new normal”
The study also demonstrated as the more devices users would access to follow the games the more engagement and time spent.
The biggest issue for the business is that the shift of audiences from traditional media to the web to mobile is putting at risk the advertising revenue.
What normally happens is that advertising money should follow audiences, if people move from one media to another, advertising money would normally do the same.
The fundamental issue with the current shift is that not all media have the same monetization power.
- TV has (still) higher monetization power than the web (computers)
- the web (computers) has higher monetization power than mobile
Users are more and more shifting towards the latter. The industry knows well how to monetize TV, learned in the last years how to decently monetize the web but has no real solution for monetizing the mobile landscape.
KCPB analyst Mary Meeker is showing this opportunity/threat in her annual “Internet trends” presentation since 2011.
Mobile is where monetization in traditional ways is in trouble and many companies are trying to understand what can be done, I am not sure this dilemma will be an easy one to solve.
In the high level sport business, TV rights are still for now protecting the huge revenues that Sport right owners are attracting (mostly sport federations, leagues, clubs) and which are paying for the whole business, much more than sponsoring money.
The problem is that most right-holders (those who buy rights like broadcasters) are basing very often their business models on TV + web + mobile advertising revenues, with TV being their comfort zone and the safest revenue generator (for now), that’s why they are hyper-protective of the classical TV business.
At the moment digital sport is a very solid and growing business but i think we all collectively have to carefully evaluate the impact of the digital/social/mobile shift and consider how in the medium term it could undermine the foundations of the business. We should not hide our heads in the sand but look for opportunities in this evolving scenario.
I also do have an instinctive feeling that some old media could rebound a bit this year (thinking TV and paper) in some selective cases, but I maybe completely wrong.
What can prove that I am wrong and make 2013 a real turning point in digital sport?
- Social TV with Second Screen apps change the TV user experience (Viggle, Shazam, Zeebox)
- Apple TV arrives and disrupt the TV business (or Google TV with Samsung)
- Cable operators start to transition to IP based distribution and enable new platforms for sport
- Netflix, Hulu, YouTube become the de-facto standard for live sport
It’s easy to understand how most of them are not easily achievable because of the protection guarantee to the existing right-holding broadcaster by the rights paradigm.
This is true for those sports for which media companies fight to acquire rights but less for those sports that are eagerly trying to find channels (TV and digital) to broadcast their events.
I would expect a lot more innovation from those (minor) sports that need to find ways to bring their events and content to their fans on all platforms, they are more inclined to experiment and have a lot less constraints. They may miss the budget and the vision. Hence they represent an opportunity for those players in the business who are focused on innovating.
2013 will be in any case an interesting year building up for another huge year with Winter Olympics and FIFA World Cup in 2014.